March 28, 2016
As we head into Earth Month this week, it's a good time to review a recently published book by E. Freya Williams entitled, Green Giants - How Smart Companies Turn Sustainability into Billion-Dollar Businesses. In it, Williams explores nine businesses that have revenues of more than one billion dollars from products with sustainability or social good at their core, amounting to more than $100 billion a year and equivalent to the 62nd largest economy in the world.
Featuring established giants like Unilever, Whole Foods Market, IKEA, GE (Ecomagination), Nike (Flyknit) and Toyota (Prius) and newer giants Tesla, Chipotle and Natura, Williams delves into six key success factors that have led to the creation of these sustainable brands. "These are not boring, crunchy granola companies or obscure B2B suppliers, "writes Williams. "They are some of the most vibrant, sexy brands out there today."
The six factors are:
- The iconoclastic leader. In each of these nine companies, the creation of these products can be traced back to one courageous individual (not necessarily the CEO) who was prepared to stand out from the crowd.
- Disruptive innovation. These companies succeeded by disrupting the status quo rather than by creating a more socially conscious version of an existing product.
- A higher purpose. Williams argues that having a clear higher purpose can lead to financial success.
- Built in, not bolted on. Integrating sustainability into the core business rather than treating it as an appendage enables sustainability to be a business driver rather than a cost center.
- Mainstream appeal. Williams asserts that too many "green" companies and products have failed in the marketplace because they depended on a core group of devotees rather than having a wider appeal.
- Walking the talk. Finally, corporate actions that incorporate transparency, responsibility and collaboration speak louder than advertising and gimmicks as ingredients to success.
Given our CSR priority on the development of nonprofit leaders, I was interested in the chapters on the iconoclastic leader and a higher purpose. As with just about any organization, leadership is critical, and Williams argues that "the decision to either start or change course to a sustainable strategy can almost always be traced back to one specific individual." Iconoclastic leaders are ones that have "a unique combination" of the four Cs:
- An inner conviction that they need to take things on.
- The courage to stand up and change things even if it might seem counterintuitive or risky.
- The commitment to stick with an idea even if there are serious obstacles.
- Being contrarian and happy to be seen as an outsider.
Williams also asserts that in order to be successful, companies need to be guided by a purpose not only to be financially successful, but also to positively impact the world. Here is the "higher purpose" of each of these brands:
- Chipotle: "Food with integrity."
- GE Ecomagination: "To invent and build things that power the world."
- IKEA: "To create a better everyday life for the many people."
- Natura: "To make people feel good about themselves, about others, and about the natural environment and the whole of which we are part."
- Nike Flyknit: "To bring inspiration and innovation to every athlete in the world...If you have a body, you are an athlete."
- Tesla: "To help expedite the move from a mine-and-burn hydrocarbon economy toward a solar electric economy."
- Toyota Prius: "Contribute to the economic growth of the country in which it is located (external stakeholders). Contribute to the stability and well-being of team members (internal stakeholders). Contribute to the overall growth of Toyota."
- Unilever: "To make sustainable living commonplace."
- Whole Foods Market: "With great courage, integrity, and love, we embrace our responsibility to co-create a world where each of us, our communities, and our planet can flourish all the while, celebrating the sheer love and joy of food."
Meant to be read and absorbed by corporate social responsibility professionals, social entrepreneurs, marketers and operations managers alike, Green Giants advocates for a more sustainable approach to business and argues that having a higher purpose equals profits and financial success. She suggests another wave of sustainable companies that are poised to join this billion dollar club: Warby Parker, Airbnb, The Honest Company, SweetGreen, Patagonia and Method Home and cautions that we ignore this trend at our peril.
Happy Earth Month!
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